Let's talk about EVgo

There are 3 large national Charge Point Operators (CPO) in the United States:

• Tesla Supercharger
• Electrify America
• EVgo

EVgo is the only one that is publicly traded and solely focused on EV Charging (whereas Tesla mainly wants to sell cars). So it's our best source of information into the realities of being a Charge Point Operator. As with many stocks, and especially EV focused ones (unless you're newly IPO'd Vinfast which is literally being traded by insane people but that's another story) EVgo's stock hasn't had a great past 12 months:

But we know that being a CPO is hard because it takes a lot of capital to build EV Charging stations and utilization is still low (but rising fast) and in some cases demand charges eat away profits and all that. And also, the general public got super excited about EV and EV Charging stocks during the heady days of '21 and '22 (prior to the Nov collapse) and things like profits didn't matter because "Look at Tesla!" so those stocks were artificially high and the drop isn't necessarily indicative of company performance but rather unrealistic expectations that initially propped up the price....but look, I'm not a financial analyst.

We can learn some cool things about being a CPO from reading EVgo's quarterly reports and they do an excellent job with easily digestible earnings call presentations. From their most recent one my favorite takeaways were that:

1) Utilization is starting to climb to the point of exciting revenue opportunities.

From the earnings notes:

"Increased throughput demonstrates compounding effects of more EVs, more powerful EV batteries, and increased utilization at EVgo locations":

• Utilization ≥ 15% at 30% of DCFC in June 2023
• 27 markets at 10% or above utilization in June 2023

2) Don't sleep on Autocharge+ (see my post on this topic)

"Autocharge+ used to initiate 13% of charging sessions"

Tesla drivers love the fact that you simply plug in and charge! EVgo and Electrify America (and others) have struggled with glitchy apps or faulty credit card readers.

Simply plugging in and charging is the future, once the OEMs stop putzing around and work with the CPOs to make this feature happen fast we're all in a much better EV Charging world!

3) EVgo eXtend may be the saving grace of the company's financial futures (at least in near term).

Just look at the eXtend revenue compared to other sources of revenue:

With the traditional CPO model EVgo has to spend A LOT of money up front and get paid back over years before real money starts coming in. With eXtend, they get paid much faster using a more traditional, general contractor model (I believe this is accurate, feel free to correct me).

Also from the earnings call as it relates to eXtend:

"Delivered charging equipment, constructed, and began commissioning first locations for Pilot Flying J and GM"

That sounds nice in and of its own, but when you realize that Pilot is cleaning up with NEVI grants (and their doing it in partnership with EVgo (I'm assuming here but seems like a safe bet)) then you realize how eXtend can help with immediate cash flow while utilization will provide long term cash flow.

From Loren McDonald's analysis on the first 5 NEVI awards:

"While it is still early with only five states announcing winning NEVI bids, we are starting to see a trend among early successful bidders. Tesla and Pilot Travel Centers account for more than one-third of winning bids at 34.2%."

Related to eXtend and their partnership with Pilot and GM, here's where I enter the land of conjecture...

Three weeks ago I covered the announcement by 7 OEMS and their joint venture to create a DCFC Network and one of the comments said:

"I suspect there may be a yet to be named existing network operator involved, allocating projects already in the pipeline to this joint venture."

To which I replied:

"I know EVgo has done development for others so they cold be a likely partner"

And so if I was a betting man, I would put my money on the 7 OEMs partnering with EVgo vs:

A) Building their own from scratch because large OEM's aren't that great at doing things outside their wheelhouse of building vehicles

B) Partnering with Electrify America for the sole fact that EVgo is already doing this with GM/eXtend...but who knows...cause Mercedes-Benz AG , MN8 Energy , and ChargePoint are also partnering to build out a network! (fun fact, MN8's CEO was at Goldman working with Chargepoint on their Chargepoint as a Service offering just prior to joining MN8).

Related to B, an informal poll I ran yesterday has EVgo with a higher perceived reliability vs. Electrify America but that's neither here nor there.

There was a time when I didn't think EVgo would survive because their Development and SGA costs were crazy high and they were burning cash much faster than it was coming in and I wasn't convinced they'd be able to sell enough stock to continue...but they may just be on to something! (another fun thought is what if Electrify America got together with some financiers and just bought EVgo or visa versa but I digress...)

And if you're wondering, the reason I analyze and contemplate all this stuff is that Sona Energy Solutions is a small version of EVgo. We're currently working with a national #QSR on being a CPO on their property and we're helping another retailer develop and install DCFC (similar to eXtend). If you're interested in EV Charging but too small for EVgo to pay attention to, please reach out to discuss collaboration opportunities!

What are your thoughts on EVgo or CPOs or DCFC?